396.1–ISG/12–150: Telegram

The United States Delegation at the Intergovernmental Study Group on Germany to the Secretary of State


Sigto 327. Byroade and Perkins,1 McCloy and Bruce. Limited distribution. Heads of delegations ISG held special meeting on PLI today at request French delegation. Massigli briefly reviewed progress of discussions, indicating he appreciated efforts US and UK meet French viewpoint. Distance between delegates was not very great and agreement could probably be reached quickly. However, while discussions [Page 793] had been going forward, situation in Germany had changed. Adenauer’s recent requests, election in Germany and other difficulties had created new situation. The steel problem had been resolved temporarily in manner which would work at least for a while by HICOM. The revision of PLI was therefore not an urgent problem.

Massigli suggested that it would be unwise for allies in these circumstances to give up as important a bargaining card as relaxation of industrial limitations before discussions with Germans on defense arrangements begin. He said the French HICOM in Germany was greatly disturbed at multiplicity of German demands and feared that allies were dissipating their bargaining power. He proposed that PLI discussions be adjourned for some weeks, after which they could be resumed and quickly concluded. In further discussion he indicated that period of time of recess would be from 3 to 6 weeks.

Gainer and Holmes expressed concern regarding effects of suspension of discussions, pointing out that Foreign Ministers had announced in New York that PLI would be reviewed. Gainer said he had just been informed by telephone from Germany that difficulties re German debt acknowledgment would be resolved within the week and New York decisions could be carried into effect. He feared that suspension of talks would have extremely unfavorable political effect in Germany and might upset arrangements now being worked out. In addition US representative pointed our [out] urgency lifting restrictions which were obstacles to Western defense and prevented additional German production of materials in short supply. Both Gainer and Holmes agreed that any announcement concerning PLI should be deferred until after Germans had signed debt acknowledgment. Holmes and Gainer made several attempts to find basis for continuing discussions with view to reaching interim agreement, but Massigli made clear continuation of discussions would have no result. He said alternatives were either to recess discussions as he proposed or to submit report to Foreign Ministers which would be disagreed. Such a report would not reflect true situation since there is greater measure of agreement than would be reflected in report. It was eventually agreed to adjourn discussion until Monday.2

After meeting Holmes suggested to Gainer that Bevin discuss matter with Schuman, who arrives in London tomorrow with Pleven,3 in effort to modify French position.

[Page 794]

After meeting described above there was informal meeting of alternates at request of Gilet, French alternate, who said he wished make position stated by Massigli more precise. He was exceedingly frank. He said he had no authority engage in any negotiations except on one or two minor points. He would not be able in any report to agree to positions which he had offered in discussions to date, dependent upon agreement on steel (i.e. elimination of restrictions on chlorine, ammonia, aluminum et cetera). He had made every effort during his last visit to Paris to find some method of carrying on discussions, but without success. He explained that Minister of Defense4 was unwilling to clear any positions involving relaxation of controls until question of German participation in European defense had been settled.

Gilet went on to say he had discussed PLI negotiations in 2 sessions of 1 hour each with Schuman and had obtained no relaxation of French determination not to agree action at present time. He had asked Schuman whether this meant he was prepared to renege on the New York Foreign Ministers’ decision review PLI.

Schuman had told him he had signed New York agreement in good faith but three basic factors had been radically altered:

Agreement on defense which had been expected by October 10 had not yet been reached;
Coke shortage had emerged, and
Germans had begun to make extensive demands on occupation powers. Schuman said he was willing accept responsibility for position which French Government felt forced to take.

Gilet emphasized that suspension of discussions would not be of long duration. He said discussions could go on for another week on various minor points, with which he could deal, after which they could be recessed for 3 or 4 weeks over Christmas without fanfare.5

Sent Department 3234, repeated information Frankfort 496, Paris 1065.

  1. George W. Perkins, Assistant Secretary of State for European Affairs.
  2. In Sigto 343, December 5, from London, not printed, Holmes reported that the “heads of delegations’ meeting PLI postponed from yesterday, was cancelled today on French initiative in view inability Massigli add anything to statements made previous heads of delegations’ meeting.” (396.1–ISG/12–550).
  3. René Pleven, Prime Minister of France.
  4. Jules Moch.
  5. In Sigto 328, December 2, from London, not printed, Holmes reported his appreciation of the situation that had developed with regard to the PLI. He was “extremely doubtful” that there would be any change in the French attitude, and this left three possible courses of action open to the United States: (a) to continue efforts to reach some kind of interim agreement. This would involve minor changes and adversely affect German opinion, (b) to put off temporarily further review of the PLI and try to get the High Commission to resolve some of the outstanding problems, or (c) to recess the discussions until the first week in January, at which time the United States could choose among several alternatives including an interim agreement, while the pressure on the French to do something would have had a chance to work. (396.1–ISG/12–250) The Department of State replied that if the French position remained unchanged, it preferred the third course. (Tosig 200, December 2, to London, not printed, 396.1–ISG/12–250)